Pandemic, early winter fuels online sale of appliances
Nidhi Singal December 29, 2020
Pandemic COVID-19 along with the early onset of winters across the country has derived demand for winter appliances such as geysers, water heaters, immersion rods, and room heaters. Unlike previous years, where consumers would visit stores to make purchases, there has been a significant shift towards online purchases.
Hari G Kumar, Vice-President - Large Appliances at Flipkart, says, "We are witnessing over 50 per cent increase in searches for winter appliances in the first 20 days of December 2020 over the same period last year with room heaters accounting for over a third of this demand. Interestingly, over 50 per cent of this demand came from Tier-III and beyond cities while cities such as New Delhi, Lucknow, and Gurgaon witnessed the maximum demand for winter appliances. This increasing demand has also marginally improved the average selling price for room heaters and geysers over the last year. We have also observed an increase in the number of sellers selling winter appliances to the tune of nearly one-third over last year."
The impact of e-commerce on the sector has been substantial. "Seasonal heating demand owing to climatic conditions during winters have always complemented our business landscape and the same continues for this year as well. In the pandemic-struck scenario, we have seen a rise in online sales of our water heaters across the platforms," says Rakesh Kaul, CEO & Whole Time Director, Somany Home Innovation Limited. The company has been getting great response from Tier-I and II cities. "With the strengthening of our product portfolio on eCommerce portal, we have seen higher demands from Tier-III and IV cities too."
COVID-19 pandemic has helped in online sales. Many customers overcame mindset barriers of setting up online accounts and making digital or online payments. As consumers are exploring, experiencing, and adopting online shopping for the first time, they are liking the idea of choosing from a wide variety of options across brands and getting it delivered home safely.
"This year, we have witnessed our online sales double its contribution vis-a-vis sales from offline channels. With demand up for consumer durable products due to the early onset of winters, lifestyle changes due to COVID, along with exclusive consumer offers, we are confident of closing the year on a healthy note," Rohit Mathur - President - Electric Fans, Water Heaters & Pumps, Usha International. The company expects online sales to continue in the post-pandemic world as well, considering people are now more digitally influenced and inclined in terms of their purchase journeys and decisions. Even for Panasonic Life Solutions, while the contribution of online sales has grown significantly. The estimates continue to be approximately 70 per cent of trade and 30 per cent offline.
However, it isn't the case with every brand. For some, offline continues to contribute a big chunk. "Offline sales contribute majorly to our business and we saw a strong growth trajectory from online channels in recent times," avers Sachin Phartiyal, Vice President, Appliance Business - Crompton Greaves Consumer Electricals Ltd.
Component shortage but bounced back
Although COVID-19 pandemic impacted sourcing fully assembled products as well as component sourcing, local manufacturing helped brands steer through the challenge. "Like all industries, we also faced disruption in sourcing our products but we quickly bounced back, through our strategic partnership with exclusive manufacturers," explains Kaul. Currently, the group company is engaged in the assembling of water heaters at their plant in Dehradun, which has helped meet the market demands.
Echoing the sentiment, Ravindra Singh Negi, President - Electrical Consumer Durables, Havells India says, "We did not face any major issue as most of the components for room heaters are procured in India. However, there are few components of other heaters which we ordered in time."
The company has been manufacturing winter appliances at its Haridwar manufacturing plant and takes two-three days to reach products in North India and five to seven days in far east branches from the factory. Given the early onset of winters and dipping temperatures across the country, Havells has already scaled-up production of room heaters.
While the industry is geared up and equipped to meet the demands, the increase in prices of raw materials and ocean freight has put pressure on the bottom line. According to Panasonic Life Solutions India Pvt Ltd, there has been a huge unprecedented upsurge in the prices of copper, aluminium, steel, ABS, and resin. Currently, the company has outsourced products from dedicated overseas vendors.
New launches to drive sales
As last winter was the coldest in the northern region in decades, leading to record sales of electric water heaters and room heaters, companies have been aggressive this year and have launched many new models across home appliances. Usha International has introduced nine models - all 5-star rated electric water heaters - well ahead of the onslaught of the winter season, which was well-timed as November this year was declared the coldest in many decades.
Somany Home Innovation Limited under the Hindware brand has launched seven new SKUs in instant and storage water heaters category in this financial year, including IoT enabled water heaters. Witnessing increasing demand for high-end room heaters mainly from north region, followed by east, west and few places in south like Ooty, Munnar and few other hill stations, Havells has launched digital oil-filled radiators, which warm the room without burning oxygen.
Since most people are staying indoors and working from home, manufactures expect consumers to upgrade to more efficient room heaters this season. Ajanta-Orpat Group said due to complete nationwide lockdown, fan season has gone in vain, but we are expecting a surge in demand on the ongoing winter season.